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Winning with Jack Welch and Suzy Welch
 
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Jack Welch was the CEO of General Electric from 1981 to 2001. Under his leadership the GE stock went up by 4,000 per cent, making it the most valuable company in the world. Fortune named him the ‘Manager of the Century�in 1999

Suzy Welch is a former editor of Harvard Business Review. She is also the co-author of Jack Welch’s latest book Winning

You can e-mail Jack and Suzy Welch questions at winning@nytimes.com

(Please include your name, occupation, city and country)


I started my business 17 years ago, and it has grown into a solid, profitable operation. My question is: where do people like me go for advice on moving to the next level of growth? Most books seem to focus on startups and large businesses. We're neither, but we have great people, a great business model and a real fire to create something special.
–Jerry Giampaglia, Mahwah, N.J.

One answer to your question is as close as your phone, although what we are about to suggest may seem like an awkward �and even outlandish �way to use it. Pick it up and call companies you see using exciting management breakthroughs �and ask if you can watch them in action. We bet the answer will be "sure, let's set it up." Counterintuitive?

May be, but we have seen that dynamic play out over and over in the past several years. Indeed, we have found that most people are bursting to talk about their successes with anyone who asks, regardless of the inquiring company's size, public profile or market might. In other words, you don't have to be a big boss or the employee of a famous company to get doors to open. You just need to have the guts to ask for advice.

There is a whole world of companies out there using management practices that could really improve your performance. Armies of companies, for instance, learned about lean manufacturing from Toyota, which proudly opened up its factories like living classrooms. Wal-Mart has, likewise, shown many visiting companies how to use information technology to fine-tune product availability and better meet customer needs.

But don't just think about calling the usual suspects for advice. Hundreds of companies are using the Six Sigma quality programme, some of them in interesting new ways. The same is true for many up-and-coming management concepts, such as the customer loyalty measurement called the ‘net promoter score� The point is: Teachers are everywhere; you just have to find them. And that's not hard �the media continuously highlights success stories, often putting the contact point right in front of you.

There's a red flag here, however. Visiting companies to watch them in action can be great, but the exercise is pointless unless your own people are ready, willing and able to embrace outside ideas. If they're not, some adjustment to your culture is probably necessary first. To do that, you have got to kill any Not Invented Here (NIH) Syndrome floating around your organisation and replace it with a new value of open-mindedness. You can jumpstart that process by using praise, money and promotions to celebrate employees who find outside ideas and bring them "back home." Before you know it, you will find yourself deluged with good ideas from every quarter.

Bringing the outside in can be daunting, of course, especially in a successful company like yours, but don't let the challenge deter you. If you really want to get to the next level in growth, look everywhere for companies using ideas that can open your eyes, expand your mind and change your ways �and then pick up the phone and call.

How do you weed out the bad apples in an organisation?
–David Michalek, Bartlett, Ill

Start by putting down the pruning shears and picking up a buzz saw. Look, nothing hurts a company more than when the bosses ignore, indulge or otherwise tolerate a jerk �or two or three �in the house. Such latitude undermines organisational trust and morale. Without those, the competitive linchpins of collaboration and speed are just plain harder �not to mention the fact that jerks take the fun out of work.

But before we talk about how to get rid of jerks - or bad apples, as you call them - let's be clear about who these people are. In business, you can divide employees into four categories by looking at them along two dimensions: how well they perform �ie, how often they make the numbers �and how well they demonstrate company values.

Now, 'values' is a lofty and somewhat vague word, but all it really means is behaviours. Values are how companies want their employees to act, which is why most lists include virtues like integ-rity and fairness. Those are necessary, but any list of values can �and should �also be linked to strategic goals, so a company could, for instance, add values that say: we think and act globally, celebrate teamwork, show a strong bias for speed or approach problems with urgency.

Back to the four types of employees. The first type includes people with good performance and good values. With these winners, management's job is easy �nurture, reward, and push onward and upward. The second category encompasses those who have neither good results nor good behaviours. Again the job is easy �show them the door.

A third kind of employee may deliver weak results for a year but still exhibit all the behaviours you want, so managers should give these well-intentioned people a second or third chance. Type Three employees may have a particular performance issue, but they are not jerks.

No, that's the fourth kind of employee. This is the worker who delivers the numbers but doesn't live the values. You know the type, who doesn't? They exist at every level in almost every organisation. These high performers can be mean, secretive or arrogant. Very often, they kiss up and kick down. Some are stone-cold loners, others moody, keeping those around them in a kind of terrorised thrall.

And yet, too often Type Fours remain unscathed. Sure, their bosses might rebuke them, but things usually don't change after that. There has been no sting. Indeed, most of us have probably been guilty somewhere along the way of letting the burning desire for good results cover up the sins of an employee's poisonous behaviour. We have squirmed �and looked away.

You can't do that! If you have a jerk problem, you have to stare it in the face. And that process can only start with a transformative eureka. Company leaders must come to believe that jerks hurt the organisation more than they help it. While their results are great, their collateral damage to the culture and overall competitiveness is far greater.
Once the leadership buys into that line of reasoning �and really feels it to their bones �getting rid of jerks is pretty straightforward. Managers have to make sure everyone in the company knows the values. They have to demonstrate them themselves, lavishly praise and reward them in others, and basically talk about the values to the point of you gagging. In fact, the values have to be so blindingly apparent to people in the organisation that if someone doesn't live them, the interloper would be spotted immediately.

But the real clincher in ridding an organisation of jerks is to remove the ones you have, and do so with public fanfare. It's just wrong to can a person for a values violation and then soft-pedal the event with the story line "Joe left to spend more time with his family." Leaders need to say, "Joe had to go because he did not think globally" or, if diversity is a value, "Joe was asked to leave because he was not gender and race-blind in hiring." Every time you get rid of a jerk, don't miss the opportunity to make it a teaching moment. Pretty soon, people will learn that the consequences of jerk behaviour have a steep price indeed. Now, no organisation will ever weed out all its jerks. Some will slip by because their performance is so terribly good or their bad behaviours are so frighteningly subtle.

How do you explain the HP mess?
–Edward Yingling, Phoenix, Ariz

First, by observing that organisational crises often seem to make smart and sensible people do foolish things, like panic and point fingers. That said, who did what wrong at Hewlett-Packard still remains unknown. Perhaps, as the fog of war lifts, people will eventually understand which individuals ultimately are responsible for this unfortunate episode.

Lost in all the current intrigue, though, is the fact that the HP mess once again confirms (for us, that is!) that governance experts have it wrong when it comes to one of their favourite causes, the separation of CEO and chairman. Indeed, some self-designated watchdog groups that rate corporate boards assign multiple goodie points for such a split. And yet, despite the high-minded proselytising about why the roles should be distinct, HP proves how damaging it can be when they are.

The reason is that all companies, no matter what their size or industry, operate best with mana-gerial clarity �when people know which way the company is going and who is leading the charge. At HP, employees should have had one boss in CEO Mark Hurd. But there was another boss too, board chairwoman Patty Dunn, who was reaching out to some employees with her own agenda and deplo-ying company resources. That meant HP was being run by two leaders, a dynamic that can easily lead to confusion or, worse, employees shopping around for the answer they like best.
The situation at HP was untenable. A board's job is not to micromanage a company; they just don't have the time to know enough. Yes, a board should have a lead director, to pull the members together and create an independent voice. But a lead director is not an alternative CEO. Instead the board, united by the lead director, has one main role: It should use its collective wisdom, judgment and common sense to pick the CEO and provide that person with cons-tructive challenges, insight and support.

The board must debate and buy into company direction and, more important, monitor that direction with trips alone �without the CEO �to see whether what it is hearing in the boardroom matches the reality of what people in the field are feeling. The board has to decide whether the CEO is delivering results and doing it the right way. If so, the board needs to redouble its support, and if not, it must make the tough choice for change.

At HP, little of this appears to have been going on; the board operated like a rogue cell, both meddling and forming factions. And in doing so, it undermined the company that it should have been bolstering. If there had been one boss in charge, in the person of CEO and chairman, coupled with a good lead director, chances are this wouldn't have happened. And perhaps it is time for companies and the governance police �with their misguided point systems �to confront that reality.

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